FTSE gains as US consumer confidence rises

Britain’s FTSE inched ahead on strong consumer data from the US as investors waited to find out just how much European banks would seek to borrow under the European Central Bank (ECB)’s latest loan plan.

The FTSE 100 took on 0.21%, or 12 points, to 5,928 and the Mid-250 index added 0.5%, or 57 points, to 11,529.

India-focused oil refiner Essar Energy (ESSR.L) made the biggest gains on the FTSE 100, up 5.8p, or 5.4%, to 113.4p. It lost a $615 million insurance claim, but said the case will not affect the company’s accounts.

The group was also downgraded by analysts at Goldman Sachs from ‘buy’ to ‘neutral’ and Deutsche Bank lowered its target price on the stock from 360p to 250p. See the FTSE’s performance and the index’s top winners and losers.

Cautious trading ahead of LTRO results

European markets traded cautiously ahead of figures showing European banks’ funding requirements under the European Central Bank’s long term refinancing operation (LTRO).

Matthew Nelson, trader at Spreadex, said: ‘FTSE is finishing the day again looking for direction in anticipation of the LTRO tomorrow.

‘December’s LTRO injected liquidity and prompted a stock market rally, and with estimates ranging from an injection of anywhere between €200 billion to €1 trillion we are likely to see a correlation between the size of the refinancing and the increase in risk appetite.’

Earlier in the day investors showed a wave of renewed confidence as Italy sold €6.25 million of five- and 10-year bonds at lower yields than last month. The yield on benchmark 10-year Italian bonds narrowed to 5.5%, down from 6.08% in January.

Ireland also announced that it will call a referendum on the European Union’s terms for tighter budgetary rules in the union. However, markets seemed unmoved by the announcement, and a date will be set in the coming weeks.

Other stock markets in Europe also crept ahead: Germany’s DAX index increased 0.57% to 6,888, France's CAC 40 index took on 0.44% to 3,457, and the FTSEurofirst 300 index of top European shares added 0.23% to 1,076.

In the US core durable goods orders slumped 3.2% in January, indicating less production.

However, consumer confidence figures increased from 61.5 in January to 70.8 in February. The numbers indicate the public are feeling more optimistic about the economic outlook, pushing the markets ahead.